As opposition mounts, FTC agrees to examine Google/DoubleClick deal

New York's Consumer Protection Board has joined consumer groups and Microsoft …

The Federal Trade Commission has agreed to open an antitrust investigation into the proposed Google/DoubleClick merger, according to industry sources quoted in the New York Times. The fact that the FTC is investigating the deal (rather than the Department of Justice, which can also look into antitrust issue) has led observers to speculate that privacy concerns may play a role in the review—good news to consumer advocates who oppose the deal on privacy grounds.

Only days later, consumer groups got in on the action. The Electronic Privacy Information Center, the Center for Digital Democracy, and the US Public Interest Research Group filed a complaint with the FTC on April 20, arguing that "neither Google or DoubleClick have taken adequate steps to safeguard the personal data that is collected" by their respective services. They asked the FTC to put the merger proceedings on hold until Google changes certain "unfair and deceptive trade practices."

On May 1, these groups were joined by the State of New York Consumer Protection Board, which submitted a letter of its own to the FTC. In that letter, the Board worried that the merger "will result in the creation of 'super-profiles,' which will make up the world's single largest repository of both personally and non-personally identifiable information... In the worst-case scenario, this repository of super-profiles could, for example, be made available to secondary users including marketers without consumers' knowledge or consent, as well as made public as evidence in litigation or through data breaches." The CPB also calls on the FTC to halt the merger until these data protection issues have been examined more thoroughly.

There's no reason at this point to believe that the FTC will kill the deal, but the fact that both the US government and the European Union are scrutinizing the company might give Google execs pause. Microsoft's experience serves as a warning here: fighting major antitrust actions in both the US and Europe can cost billions of dollars and take a decade to resolve. Google is not yet in that position, but the company is clearly on the radar screen of regulators in both places and needs to tread lightly as it continues to expand.